The BBC commissioned Frontier Economics to explore longer-term funding options relating to concessionary TV licenses for the over-75s. A Frontier discussion paper, published today, looks at the changing context since the concession was first introduced in particular the issues of intergenerational fairness and the overall financial context.

In 2000, the government introduced and funded free television licences for the over-75s. In 2015, the government decided that it would no longer pay for the over-75s licence fee concession, and that any such concession would in future have to be paid for by the BBC. The current concession is set to fall away in 2020, and Parliament has given the BBC the duty to consult on what the policy should be for the older population.

Drawing on new analysis and existing evidence the discussion paper concludes that:

Over the last two decades, older households have seen a marked improvement in their absolute and relative living standards. Incomes, wealth and life expectancy of older people have improved significantly, pensioner poverty rates have fallen, and older households report higher well-being on a range of metrics.

In 2001/02, the concession cost the government £365 million. If the BBC were to replicate the current concession, we forecast that by 2021/22 the cost to the BBC would be £745 million.

These changes give cause for reflection on what an appropriate approach to providing concessionary licences to older households might look like. This discussion paper provides useful context in advance of the full Frontier report on longer-term funding options relating to the over-75s concession which will be published shortly.